GEORGE TOWN, July 8 — The imposition of a 25 per cent tariff by the United States will impact Penang’s highly export-oriented economy, said Chief Minister Chow Kon Yeow.

He said the state’s export-oriented economy and deep integration into global value chains made this inescapable.

“While semiconductors are currently exempted from the tariff, the broader 25 per cent imposition still poses an economic risk,” he said in response to the recent announcement by the US.

He said variations in tariff rates across the Asean region could distort trade dynamics and influence future investment decisions throughout the region.

Chow also noted that Penang is a key contributor to Malaysia’s exports to the US.

“Between January and May 2025, Penang accounted for 55 per cent of Malaysia’s total exports to the US, valued at RM52 billion,” he said.

He said a large portion of the exports originated from US multinational corporations operating in Penang.

These companies primarily ship finished products or components back to their parent companies.

“Electrical machinery and equipment constituted 77 per cent of Penang’s exports to the US, with a large share driven by the semiconductor industry,” he added.

He said there is an urgent need for the Malaysian government to continuously engage with its US counterparts to negotiate for a lower tariff rate.

“Attention must also be directed towards addressing non-tariff policies and trade barriers to safeguard Malaysia’s trade competitiveness,” he said.

He said Penang will continue to work closely with the federal government and industry players to safeguard the nation’s economic interest.

“The state will also remain committed to enhancing infrastructure, streamlining business processes, and improving the cost of doing business to sustain its role as a vital hub in the global supply chain and ensuring long-term economic resilience,” he said.